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Economic growth in Greece: the cost of a failed adjustment programme

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  • T. Efthimiadis
  • S. Papaioannou
  • P. Tsintzos

Abstract

This article aims to assess the cost of failure of Greece's ‘First Economic Adjustment Programme’, in terms of potential Gross Domestic Product (GDP) growth. In particular, real GDP trends are estimated through filtering techniques and compared with those had the first programme been successful. The trend growth rate of GDP is estimated at −3.84% (2012Q2), against −2.21% if the targets and forecasts of the first adjustment programme had been realized. The results indicate that the failure of the first programme has had a signifying adverse effect on the country's future growth prospects as current GDP dynamics are far worse than those forecasted in the first programme.

Suggested Citation

  • T. Efthimiadis & S. Papaioannou & P. Tsintzos, 2013. "Economic growth in Greece: the cost of a failed adjustment programme," Applied Economics Letters, Taylor & Francis Journals, vol. 20(11), pages 1076-1080, July.
    • Handle: RePEc:taf:apeclt:v:20:y:2013:i:11:p:1076-1080
    DOI: 10.1080/13504851.2013.783679
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    1. Nitika Bagaria & Dawn Holland & John Van Reenen, 2012. "Fiscal Consolidation During a Depression," National Institute Economic Review, National Institute of Economic and Social Research, vol. 221(1), pages 42-54, July.
    2. Olivier J. Blanchard & Daniel Leigh, 2013. "Growth Forecast Errors and Fiscal Multipliers," American Economic Review, American Economic Association, vol. 103(3), pages 117-120, May.
    3. Robert J. Gordon, 2003. "Exploding Productivity Growth: Context, Causes, and Implications," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(2), pages 207-298.
    4. Daniel Gros & Rainer Maurer, 2012. "Can austerity be self-defeating?," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 47(3), pages 175-184, May.
    5. Michail Kiriakidis & Antonios Kargas, 2013. "Greek GDP forecast estimates," Applied Economics Letters, Taylor & Francis Journals, vol. 20(8), pages 767-772, May.
    6. Giavazzi, Francesco & Alesina, Alberto & Favero, Carlo A., 2012. "The output effect of fiscal consolidations," CEPR Discussion Papers 9105, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Cyrille Lenoël & Corrado Macchiarelli & Garry Young, 2022. "Greece 2010-18: What could we have done differently?," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 172, Hellenic Observatory, LSE.
    2. Cyrille Lenoël & Corrado Macchiarelli & Garry Young, 2023. "Greece 2010–18: What Could Have Been Done Differently?," Open Economies Review, Springer, vol. 34(2), pages 281-315, April.
    3. Robert J. Kolesar & Rok Spruk, 2024. "Effect of Austerity Measures on Infant Mortality: Evidence from Greece," Papers 2407.17084, arXiv.org.

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